Medicare is a huge benefit for those who’ve earned access to it. However, there could be situations where it might be more beneficial for you to delay or eschew Medicare altogether. But you want to be sure it’s the best move, so read this comprehensive breakdown.

Is Medicare Mandatory For Eligible People?

Medicare is not mandatory. You can choose to opt-out and not take any parts of Medicare. You’ll, however, be penalized if you change your mind in the future and decide you want to start Medicare.

Why Would You Want to Opt-out of Medicare?

There are a few reasons why someone would decide not to take Medicare, and a few that come to mind are listed below.

Let’s examine these common questions people ask when thinking about declining Medicare.

I will continue to work past 65

That’s great if that’s what you choose to do so. Depending on your group coverage, you may delay Medicare until you decide to quit working.

You should check with your benefits administrator to determine if your employer insurance is considered creditable coverage to Medicare. If the employer insurance isn’t regarded as creditable, you’ll be penalized when you start Medicare.

I have Veterans Affairs benefits

VA coverage is considered creditable for Medicare’s Part D Prescription Drug Plan. However, health coverage isn’t regarded as creditable.

Suppose you’ll never use a doctor who doesn’t participate in the VA system. In that case, you can forego Medicare Part B.

However, most veterans want to have the added coverage of a civilization doctor at some point in their life. They’ll be penalized if they did not take Part B when they first became eligible and decide to take it later.

Unfortunately, this is a situation seen far too often. When veterans need additional coverage, the penalties have made it unaffordable.

I have an ACA plan, and I think it will be cheaper to keep

If you’re receiving a subsidy based on income, an ACA plan may appear cheaper. Once you’re eligible for Medicare, you no longer qualify for the supplement. This would then force you to pay the total price of the plan, which will be considerably more expensive than Medicare.

In addition, most ACA plans will drop you when you turn 65 and are eligible for Medicare.

I’m very healthy and don’t need insurance, and I don’t even take prescription drugs

That’s fantastic. Unfortunately, as we age, we don’t get healthier. If you don’t have creditable coverage and don’t take Medicare, you’ll be penalized when you need it.

We see this statement most often when someone is first eligible for Medicare.

Can You Opt Out of Medicare Coverage?

Medicare Parts A, B, and D all have penalties. The penalties will apply if you don’t start Medicare and don’t have creditable coverage.

The penalties for Medicare Part A, Part B, and Part D are all calculated differently.

What is Creditable Coverage?

Creditable coverage means that your coverage is equal to or better than the standard Medicare.

What About Part C?

Medicare Part C, otherwise known as Medicare Advantage plans, are entirely optional and don’t have a penalty associated with them. They’re another way to have your Medicare benefits administered.

Do Medicare Supplements have penalties if I don’t take one?

Medicare Supplements like Medicare Advantage plans are optional. Due to this, they don’t have penalties associated with a Medigap plan.

However, if you don’t elect one when first starting Medicare, you’ll be subject to medical underwriting in most cases.

Mandatory Medicare for Government Employees

After March 31, 1986, Medicare is required for anyone hired or rehired as a state or local government employee. Those covered by a Section 218 Agreement already receive Medicare benefits.

Government employees qualified under the Medicare program do not earn Social Security payments for their services. Still, they must pay both the FICA and voluntary parts of Medicare.


Do I have to use Medicare when I turn 65?

You aren’t required to go on Medicare when you turn 65. You may be penalized if you choose to decline or delay Medicare when first eligible.

Is Medicare required for people with disability?

No. After 24 months of being on disability, you’ll qualify for Medicare. Suppose you choose to decline Medicare and don’t have creditable coverage. In that case, you could be penalized should you choose to start Medicare late.

Is Medicare required for veterans?

No, but it’s recommended. Most veterans we speak to love VA insurance. However, they could be missing out on additional benefits at no cost to them. In addition, if they move and aren’t close to a VA, they could have problems getting care coordination.

What is the penalty for Part A if I don’t take it?

If you don’t sign up for Part A when you are first eligible for Medicare, your monthly premium may increase by 10%. You’ll pay a higher premium for twice as many years than the number of years you delayed paying.

What is the penalty for Part B if I don’t take it?

If you don’t sign up for Part B when you’re first eligible, your monthly premiums may go up by 10% for every 12-month period you could have had Part B but didn’t sign up. In most cases, you’ll have to pay this penalty each time you pay your premiums for as long as you have Part B.

What is the Penalty for Part D if I don’t take it?

Medicare charges a penalty if you don’t have Part D or creditable coverage for several months. The penalty is calculated by multiplying 1% of the national base beneficiary premium times the number of months you didn’t have Part D or creditable coverage.

What is the Penalty for Medicare Advantage if I don’t enroll?

Medicare Advantage, otherwise known as Part C of Medicare, is optional and doesn’t have a penalty.

What is the Penalty for a Medigap Plan if you don’t enroll?

Medicare Supplements are optional insurance you can buy to fill in the gap in Medicare. Since they’re additional coverage for your Medicare, there isn’t a penalty for not enrolling.

Do You Need Help Avoiding Medicare Penalties?

Making a decision on whether to immediately enroll in Medicare or keep a different kind of creditable coverage is not an easy one. So let us give you free, expert help in making this crucial determination.

Our licensed insurance agents will go over the options available to you and even assist you in deciding if a Medigap plan would be right for you.

Give us a call today to talk to our agents. Or fill out our simple online rate form to get the best rates in your area.

Written By:
Picture of the author
Lindsay Malzone, Lindsay Malzone is the Medicare editor for She's been contributing to many well-known publications since 2017. Her passion is educating Medicare beneficiaries on all their supplemental Medicare options so they can make an informed decision on their healthcare coverage.
Reviewed By:
Picture of the expert
Rodolfo Marrero, Rodolfo Marrero is one of the co-founders at He has been helping consumers find the right coverage since the site was founded in 2013. Rodolfo is a licensed insurance agent that works hand-in-hand with the team to ensure the accuracy of the content.